Up to 60,000 workers hounded by taxman in scandal linked to 10 suicides
Up to 60,000 workers have been hounded by the taxman in a scandal which has been compared in severity to the Post Office Horizon controversy.
HM Revenue and Customs has admitted that there have been 10 suicides linked to its pursuit of “loan charges”. One woman had an abortion because of a crippling tax demand, the Commons was told yesterday, as ministers were called on to intervene and launch an independent inquiry.
While HMRC has gone after individuals - including teachers, nurses and cleaners - it is said to have ignored firms that made hundreds of millions of pounds promoting tax avoidance schemes which workers became part of, even if they didn’t know. They include one business with links to Doug Barrowman, the husband of PPE-scandal hit peer Michelle Mone.
The issue relates to self-employed and freelancer workers and contractors whose salaries went to umbrella companies, which then give a loan they did not have to repay. Most of those involved were given little or no choice in how they were paid. They were often reassured their income tax and national insurance had been dealt with.
Since 2017, HMRC has been going after individuals, arguing they are liable for tax their employers should have paid. “We are looking at another Horizon scandal,” DUP MP Sammy Wilson told the Commons. “The parallels are frightening.”
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Of those being targeted, he said: “Some people will argue it is their own fault. The fact is, many did not volunteer to go into these schemes. Some people were put into these schemes and did not know they were in them.
“As far as they were aware they were employed by a contractor and their tax was being deducted, but that wasn’t the case. These were not rich people employing fancy accountants to tell them now to avoid their tax. Many of the people caught up were ordinary workers, nurses, teachers, cleaners.”
He added: “Because of the action of a government department, we have 10 people who have committed suicide. Others have attempted to take their own lives."
The debate heard of “human tragedies” and the “devastating consequences” of people being chased for money they did not know they owed. One example was a demand for £500,000, while another person was being asked to repay twice their monthly income.
Conservative MP Greg Smith said: “We have harrowing stories of how people’s lives have been ripped apart by the loan charge.” Desmond Swayne, another Tory MP, accused HMRC of having a “vendetta” and of “torturing so many of my constituents.”
HMRC was also accused of being “judge and jury”, a similar criticism of the Post Office after it prosecuted hundreds of subpostmasters and mistresses after what turned out to be failures of the Horizon ITV system.
An HMRC spokesperson said: “The loan charge seeks to recover tax that has been avoided by disguising income as loans. It is our responsibility to collect the tax that people owe. We take the wellbeing of all taxpayers very seriously and recognise that dealing with large tax liabilities can lead to pressure on individuals.
“The support we have in place to help people settle their previous tax avoidance includes offering payment by instalments: these arrangements are based on what the taxpayer can afford, and there’s no upper limit over how long we can spread payments. Our message to anyone who is worried about paying what they owe is: please contact us as soon as possible to talk about options.
“Above all we want to prevent people getting into these types of situations and our message is clear - if a tax scheme sounds too good to be true, it probably is.”
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